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Canadian Tax - Top Tips for Expatriation

There are a lot of reasons for Canadian citizens to decide to leave Canada, such as a great job or contract opportunity, a different place to raise a family or to retire, seeking a better climate or culture, a desire for adventure and so on.

There are a lot of reasons for Canadian citizens to decide to leave Canada, such as a great job or contract opportunity, a different place to raise a family or to retire, seeking a better climate or culture, a desire for adventure and so on.

Before you Leave

Whatever your reason might be to leave Canada, there are some tax considerations you should be aware of. The biggest personal and tax question will be whether you are leaving Canada short term or permanently.

Making sure this question is answered fully is not as easy as you might think. It will require a checklist of items to be completed.

Discuss your Tax & Financial Situation With a Tax Professional

Prior to leaving Canada, meet with a tax professional that specializes in Canadian expatriates, to understand what’s required in order to sever your residency status and file the required departure tax return or full year resident tax return.

You will be taxed very differently based on whether you retain Canadian tax residency or establish tax residency in your new country.

Consider your Real Estate

Owning real estate can be an indicator that you may be planning to return to Canada. If this is not the case, you may want to consider selling your property or renting it to a third party.

If you retain the property for rental, a long term rental agreement should be in place and you should ensure that you are meeting the non-resident rental reporting and withholding requirements.

Preparing to Leave

As well as real estate and tax considerations, you will need to be willing to cancel your right to healthcare in the province you reside in before departing. You will also need to:

Cancel your GST/HST and Child Tax Benefit

Consider closing your bank accounts

Cancel your driver’s license and insurances

Ensure that the appropriate non-resident withholding tax can be remitted to the CRA

Understand your requirements to pay departure taxes if you become a non-resident

Cancel memberships, subscriptions and notify any clubs

When planning for visits back to Canada, the length and frequency of these visits need to support your new residency status.